Define: Nonmetered Licence

Nonmetered Licence
Nonmetered Licence
Quick Summary of Nonmetered Licence

A nonmetered licence is an agreement that permits the use of a patent in exchange for a flat percentage of sales, regardless of the actual usage of the patent. However, the Supreme Court has rejected this type of licence as patent misuse, as the buyer has the right to pay only for actual use. In simpler terms, a nonmetered licence is an agreement to use a patent where the payment is not based on usage, but rather a fixed percentage of sales.

Full Definition Of Nonmetered Licence

A nonmetered licence is a patent licence agreement where the licencee pays a fixed percentage of sales in exchange for the right to use the patent, regardless of the extent of its usage. For instance, if a company agrees to pay a 5% royalty on sales of a product utilizing a patented technology, they would pay that 5% irrespective of whether they sell 100 units or 10,000 units. However, the Supreme Court has deemed nonmetered licences as patent misuse, asserting that the buyer has the right to insist on paying solely for actual usage. Consequently, nonmetered licences are not commonly employed in patent agreements. For example, Company A agrees to pay a 3% royalty on sales of their new product incorporating a patented technology. Even if they only sell a few units, they are still obligated to pay the 3% royalty on those sales. This example effectively demonstrates how a nonmetered licence operates by illustrating that the licencee pays a fixed percentage of sales regardless of the actual usage of the patent.

Nonmetered Licence FAQ'S

A nonmetered license is a type of licensing agreement where the licensee pays a fixed fee or royalty for the use of a particular intellectual property, rather than paying based on the quantity or duration of use.

In a nonmetered license, the licensee pays a fixed fee regardless of the extent of use, while in a metered license, the licensee pays based on the quantity or duration of use.

Nonmetered licenses provide certainty and predictability in terms of licensing costs, as the licensee knows the fixed fee upfront. It also simplifies the licensing process by eliminating the need for tracking and reporting usage.

Nonmetered licenses are more common in industries where it is difficult to measure or track usage, such as software licensing or certain types of intellectual property.

Yes, like any other licensing agreement, a nonmetered license can be modified or renegotiated if both parties agree to the changes. However, any modifications should be documented in writing to avoid any disputes in the future.

The terms of termination for a nonmetered license are typically outlined in the licensing agreement. If either party breaches the terms of the agreement, the nonbreaching party may have the right to terminate the license early.

The transfer or assignment of a nonmetered license depends on the specific terms of the licensing agreement. Some agreements may allow for transfer or assignment with the consent of both parties, while others may prohibit it altogether.

If the licensee exceeds the scope of the nonmetered license, it may be considered a breach of the agreement. The licensor may have the right to terminate the license or seek additional compensation for the unauthorized use.

Yes, a nonmetered license can be exclusive if the licensing agreement grants exclusive rights to the licensee. This means that no other party can use the intellectual property during the term of the license.

Nonmetered licenses can be subject to royalties, depending on the terms of the agreement. The fixed fee paid by the licensee may include a royalty component, or additional royalties may be payable based on certain conditions or milestones.

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This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 6th June 2024.

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